Call the Bluff

I damn near fell of my chair (laughing) yesterday watching Timmy Geithner on CNBC. When asked if the President was willing to go over the fiscal cliff if the tax RATE on the top 2% were not increased, the Treasury Secretary snapped back, “Absolutely”.

Maria Bartiromo was also floored by this; she spent the next hour telling the world she thought Geithner’s position was clear evidence that the US would be going over the cliff. She had big shot Senator, Richard Shelby (R- Al) on air. She showed him the clip with Geithner making an ass of himself; the Senator looked like he had swallowed a wad of tobacco while he watched.

I was convinced that Geithner had made a blunder, a slip of the tongue that would later be clarified or retracted. Not the case. Last evening, Treasury put out a Blog about what a great job Tim did on TV (link). I took this as a confirmation that Geithner did not make a gaffe on air, his words were carefully chosen. When he said he was “Absolutely” certain that falling off the cliff was in our future if tax rates don’t go up, he meant exactly what he said.

Given that Geithner will be out of his job running Treasury soon, I’m sure that he went on TV with the blessings of Obama, and he had a scripted message from the President. There will be no negotiations on tax rates, the top rate is going to 40%, or we will be sailing off the cliff. What an idiotic bargaining position.

At this point, I don’t think there is any significant opposition to increasing tax revenue from America’s wealthiest folks; the question is how to achieve it. Raising marginal rates is one option; cutting deductions can accomplish exactly the same thing. Geithner and Obama will not consider adjusting deductions; the reasons are a mystery to me. It appears that the President wants to “punish” some folks rather than to find a compromise that achieves the desired results.

So I agree with Bartiromo, unless the President backs off, we are going cliff diving in 20 days.

I believe the President has started a war, No real bullets or sabers in this war, but there will be casualties none-the-less. The question is, “Who is going to get hurt?” The thinking by all of the pundits is that a fall of the cliff will fall squarely on the shoulders of Republicans. If they stand up to the Administration on tax rates, the Republicans will get slaughtered in the Congressional elections two years from now.

The facts force me to conclude that Obama is, in fact, using the cliff negotiations to bend Republicans over and force them into submission. The goal is to destroy the Republicans, and have the House, Senate and the White House all Democratically controlled in twenty-two months. Harry Reid would be in charge of the Senate, Nancy Pelosi would be running the House, and the President would have the last two years of his administration with the government controlled by “friendly” hands. A disaster in the making.

If tax rates go up on the wealthy, as the President has demanded, then it will generate approximately $68B per year. Every year, taxpayers take advantage of $1.1 Trillion of deductions. Minimizing/eliminating deductions could easily achieve the same revenue increases that Obama wants. Nor would not be difficult to target the limitations on deductions to those who are enjoying high incomes. What the President wants can be achieved without raising marginal tax rates. So what is the problem?

In my simple mind there is no reason not to consider attacking the problem by limiting deductions. Therefore, I conclude that politics is the problem. The President does not want to solve the cliff or the budget; he wants to punish Republicans.

Two states, California and New York make up 20+% of GDP. These states have a big say in the makeup of the House, they have the biggest electoral votes. They have been solid supporters of Obama with both money and votes. And now Obama is going to piss on them.

Income taxes in lovely California are now at an economy numbing 13%; NY is slightly behind the idiocy in California at 9%. If Obama gets his way, the combined tax bite on income will be 52.5% in Cali and 49.5% in NY. Add to this mess the 3% surcharge for Obamacare, and the 8% sales tax in these two states. Welcome to Sweden.

The chips on the Obama plan fall heavily on NY and Cali. Another big state, Texas, will reap the benefits, as it has no income taxes. Texas is as “Red” as a state can get, so when Obama is saying he is supporting his base, he’s just lying.

I think the Republicans should call the President’s bluff. Lets take a walk over the cliff; see what happens when we get to the other side. It can’t be much worse than 50%+ tax rates in the most productive states in the Union. Will Republicans get hammered in the bi-elections as a result? Maybe. But one thing is sure, if the President gets his way on tax rates today, and we also have the Republicans lose the House in two years, it sets up the possibility for a return to a more conservative frame of mind for the country when the next Presidential election comes around. If Obama gets his way, the economy will pay the price. In the process, any legacy that Obama might have had will have been converted into something like Herbert Hoover’s. So who is bluffing whom?

I have too–quite often. The Swedes like to brag about many things in their country, but they would actually prefer to live in the US, just like the rest of the world. Their taxes are 57.7%, so California and New York are almost there. Every time my various associates from Sweden come to visit in Oklahoma, they are amazed at our religious freedom, entrepreneurial freedom, absolute prosperity, and general happiness and friendliness. It is tremendously puzzling why we would want to be like them. I suppose the grass is always greener over the next ridge.

The main thing which sucks about Sweden is that it is fiscally solvent—–the US socialists always held up Sweden as their ideal model—-but the f’king Swedes betrayed them by lowering overall tax rates to 45% in the last few years, and now they’re lowering them to 41%. You just can’t trust anyone these days. And the second thing I hate about Sweden is that is doesn’t have ANY Detroit or Baltimore wannabe cities. That really sucks!

The U.S. budget deficit is running $1.1 trillion a year, and yet all Obama talks about is something that will raise around $80 billion. “Okay, Mr. President… Here’s your $80 billion. Now where would you like to get the REST of the money?”

If this simple math here were spelled out to all the “bury their heads in the sand when it comes to actual numbers” Obama-followers, then maybe when those higher rates kicked in for EVERYONE it might actually turn a few more middle-class folks into fiscal conservatives.

Obama claims that one of his biggest mistakes has been “not explaining himself properly to average folks.” Well, I’d say that the Republicans’ biggest mistake is not pounding home the message that $1.1 trillion minus $80 billion still leaves $1.02 trillion. If they give him the $80 billion, the ball is in HIS court.

To me it sees laughable to suggest voters have a 2-year memory. 2 weeks is a stretch. Plus, if I voted Republican and that person held firm by not voting to raise taxes then that person did a good job and I’d still vote for him even if the rates went up. If the fascists stomp and rob you, it makes no sense to fire one of the few who stood up for you. But voters in aggregate are morons so … nevermind.

This is just the first shoe to drop. I don’t like the $250K threshold, think it should be $85K. But whatever, the elephant in the room is the runaway budget of State Dept, CIA, Pentagon, NSA, and the dark programs. All combined have to be cut in half, plus medicare. This is the hard truth, tax rates be damned. We cannot tax our way out of this, but it’s true the rich should pay more. What are the chances of this getting done? Ha, ha.

Southern Progressive??? No, More like Southern Teet Sucker. Stealer of the lifeblood of private workers. Faker, taker, never a maker. I can smell a lazy ass Gov employee over the internet. You ooze laziness. Prevaracation is your middle name. Obey The Pug

I absolutely agree! The Republicans will be vilified either way. If the just walk away from negotiations (ensuring Obama will NOT get the unilateral power to raise the debt ceiling) they can at least know they kept their word to their constituents…no more taxes. The responsibility for the coming debacle will be squarely where it belongs…at the feet of the wastrel democrats! No doubt we will feel pain. But we will have to take our medicine sometime and I think sooner is better than later. At least our dollar might still have some value. And we are ever so much closer to finding firm footing to start to rebuild our country.

You assume this is a financial gambit. The fiscal cliff is but a political pawn to sacrifice in the next move to obtain majority in the Senate; and the winning move to stack the Supreme Court. Then the socialist progressive agenda could be implemented for decades to fully nullify the entire US Constitution. Money is just a distraction.

This is all politics and not about solving the country’s problems. Tell me if I’m wrong:
1) raising taxes won’t solve the deficit. Here is a back-of-the-envelope calculation, simple and humorous.http://iowahawk.typepad.com/iowahawk/2011/03/feed-your-family-on-10-billion-a-day.html
2) cutting the military to zero won’t solve the deficit
3) Entitlements. Repubs floated some ideas, they got shot down. What’s the Dem plan? The problem is spending and it isn’t being addressed–it’s being exacerbated.

Its simple we are broke and de leveraging. The process will go on for years as the developed world gives up all its social equality gains and joins the rest of the planet with rich ad poor economies with a constantly squeezed middle class in between. Should we forget that K street lobbyists have insured the largest income gap in memory or that the current state of affairs is the result of immoral wars starting with Vietnam which has built a bloated military larger than the next five countries combined? Conservatives have convenient memories about how we got here ad what the American dream really is.it’s certainly not to create a new fuedal society of the rich and the rest. It’s not about forcing people with medical problems to go bankrupt and its not about wars when we are not attacked. Grow up and pay your share for the greed you encouraged. Last time I looked the public voted for more equality and by the way the Confederacy lost! 150 years ago Get it?

Vietnam = irrelevant. If you force successful people to pay for failures you get less successful people and more failures. Try standing on your own two feet for a change. Maybe you can be someone who adds value to society instead of just taking away. The American dream is about opportunity, not about handouts.

While we are remembering “how we got here”, keep in mind which party started the Vietnam War. And which party ended it.
Also, it was the Dems who ran the Confederacy. You can look that up if you don’t believe me.:)
But hey. Who cares? The Dems are ascendant now. Let us know your plan. Tax the rich is a great sideshow but won’t actually solve the problem.
Cut the military to zero. We still won’t have a sustainable economy.

Here’s a bit of reality for you. The reason why raising the top tax rate is more attractive politically is that it delivers the revenue while only pissing off a tiny minority of voters. Removing cherished deductions would certainly deliver more revenue, but would piss off a lot more voters. I have no doubt that the deductions will be on the chopping block as well at some point in the future, but right now the O administration is clearly following the path of least resistance.

Also, remember that every bit of “spending” is money that’s going into the pocket of a voter and the voters have made their wishes pretty clear that they aren’t interested in seeing any cuts to their social safety nets. If the plurality of voters wanted cuts to their own pocketbooks they simply had to select the other party. Democracy sucks like that.

@Art Eclectic
>>… the voters have made their wishes pretty clear that they aren’t interested in seeing any cuts to their social safety nets.<<

If you talk to 99% of the Obama voters, they have no idea of this simple stat:
Deficit = $1.1 trillion. Obama tax increase raises $80 billion. Remaining deficit = $1.02 trillion.

Believe me, I have tried to point this out to them. There are two standard answers:
1) "This makes my head hurt. Let's change the subject."
2) "Take it out of defense," to which I reply:
The defense budget is $700 billion (and yes, that's WITHOUT "Bush's wars"). A 15% cut saves $100 billion, leaving the deficit at $920 billion. NOW what? Their standard response?
"I don't know. This all makes my head hurt."

Yes a comprehensive approach is needed….End the unecessary war in Afghanistan that costs blood and 2 billion dollars a week, end the tax credits to corporations that allow them to not only not pay taxes but allows them to get millions in tax credits, lower the Ofeense(defence) Budget by half, take away the tax writoffs that corporations and business enjoy when sending jobs away from home, make it medicare for all and require biding processes on drug prices and elimination of medical insurance companies that steal billions, Raise the tax rates on those making over $250K a year and eliminate the 15% capital gains tax for something more reasonable…–Corporations are not peope so fix that and make the politicians represent the p[eople rather than the rich….

Really? “Every bit of spending money is going into the pocket of a voter”? Like all the taxpayer money currently going to refubish mosques in terrorist country’s , or the new plant GM just announced they are building in China when they still owe taxpayer for stimulus money?

Eliminating most of the schedule A deductions would definitely screw over the blue states and be irrelevant to the red states. Would the Dems stick it to their base? I doubt it, but Nixon went to China and Clinton overhauled welfare; let’s jump off the curb (more like it than a cliff) and see what happens.

Of course the cliff is more than the 2 percenters, it’s everyone. Take AMT, ObamaCare, Payroll tax…. I say go over the cliff, in six months they’ll be an uproar. What then; if they’re smart (the red guys), they’ll wait, and wait and wait.. Timing is everything.

Sweden is great. I did not mean to dis a whole country. But Sweden is a socialist country that is very different from America. I don’t think what works there, would work here. We are about to find out…..

Sweden is a social democracy. To label it socialist is a wild exaggeration.

———————————–

Definition of SOCIALISM

1
: any of various economic and political theories advocating collective or governmental ownership and administration of the means of production and distribution of goods
2
a : a system of society or group living in which there is no private property
b : a system or condition of society in which the means of production are owned and controlled by the state
3
: a stage of society in Marxist theory transitional between capitalism and communism and distinguished by unequal distribution of goods and pay according to work done

+1 The Western Free Press has published a really Great idea. Short and Simple. But it gets the job done. Well worth your time to read. http://goo.gl/ag61c

Sadly our elected representatives have managed once again to make this a political battle instead of doing what’s right for America. This strategy is an extremely clever political ploy that puts the political ball back in the socialists court. The battle cry of Tea Party Patriots will have to wait until the push to raise taxes and destroy the producers of America is stopped. Maybe then we can get back to “Stop Spending, Stop Bailing, Stop Borrowing and Stand Up for the Constitution”.

THE WAY OF IT Sweden?? no military=NATO=we pay to protect. Clif?? To us its money,to them its the power that matters.Senator Reid said it. Hey BK.Give these smart people and I an opinon of the effects on equities and the markets over the CLIFF thanks

BK – I’m thinking he’s going for the tax RATE increase because:
a) it’s a simple trophy to wave around….people understand something with a simple number affixed to it. Speaking about reducing or eliminating deductions sounds nebulous and not serious to the average Joe.

The annual federal budget deficit, on a GAAP basis, is $6 trillion a year!!! And these bozos are arguing over a few hundred billion, lol!!!

They all know there is absolutely nothing they can do to stop this slow motion train wreck that is the world’s imploding financial system. The only option they have is to continue to drive interest rates into the floorboards.

All this chatter about a ‘fiscal cliff’ is just a sideshow for the sheeple to try to convince them that there is a dime’s worth of difference between the two parties. (there isn’t, lol)

Looking forward to the ignoramous’s that make up the Republican party committing political suicide.Any group who aligns themselves with people that believe God’s will allows for rape and subsequent pregnancy are fools and dont know God from a hole in the wall.They will be hearing these words ultimately” I never knew you”

My wife and I are the $250K family with the target on our back. The coming tax increases on my family will have a direct effect on things we enjoy that we can currently afford due to our years of working hard. We plan to terminate our house cleaner, a wonderful hard working single mom, our trainer at the gym, a 55 year old great guy and our Mexican landscape crew. On top of that we will reduce our meals out and the generous tips to our favorite servers, and drop an annual vacation that supports many blue collar jobs.
I guess we weren’t paying our fair share even though we paid over $100,000 in state and federal taxes, plus sales, property, social security, Medicare and gas tax. Obama and his voters just don’t get it. You can squeeze the small business owner like me, but it has to come from somewhere in my budget. I can’t just hit the print button for cash like Ben and Tim. I actually have to cut household spending, which means cutting blue collar jobs. And dems wonder why there is no jobs recovery. I’ll make sure to let the soon to be poorer people in our life know that elections have consequences. But the dems in office love it as dependency on government will only increase. The old trickle down theory in reverse.

So sorry you will have to make some concessions for you and your family. However, it sounds as though you don’t really even understand how the tax code and recommendations suggested will work. You won’t pay higher taxes on your first $250K.

which is not the point. The point Larry makes is that higher taxes hurt the economy. And in my opinion he’s right. However in my business if my profit structure suffers for some reason I simply raise the price I charge to make up for it. Causes inflation. Which is also harmful to the economy. And guess who is harmed the most? You might have guessed, the low to mid class.

Have you ever seen guv get smaller? Ever? They have no plans to get smaller. period. Talk is cheap and they sure do know how to talk the talk don’t they. “This so called” fiscal cliff is smoke and mirrors to obfuscate and detract Americans from analyzing and discussing the core problems in this country. What methods have the world banking cartel used to take control of both parties and plunder the wealth of America, Europe etc? Instead of falling for their divide and conquer tactics let’s discuss who it is exactly that we owe all of these trillions that were manufactured out of thin air (read that ‘counterfeit’).

This “physical cliff” nonsense is a dog and pony show. If the morons take all the “fiat” from all the billionaires it would be a drop in the budget bucket. We really have only two choices: Print our way out of this mess or default. History shows that the printing press is the way most “leaders” choose.
Get ready for a return to Weimar. The FED must be laughing until their sides ache…..and the majority of the people are clueless. We are a doomed nation. Where is George Washington when you need him?

Larry – Very well articulated and to the point.
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@george bornkamp says: “Corporations are not peope so fix that……….”

GEORGE – you hit on a pet peeve of mine. Either some people are too dense to understand it or are willfully choosing not to…..of course, corporations (all businesses) are people! Who the heck funds them, manages them, is employed by them?

Businesses are NON-existent without the humans that provide the risk capital and both intellectual and physical effort. Yeessh!

Non of you, including the author, have a clue as to what is going on here. All of the economic problems worldwide are the result of a credit bubble collapse. Standards of living must come down. It’s delusional to think the “other guys” have a way out that will let everyone “keep their money”. The federal government could collect ZERO taxes and the result would be similar. Inflation will take care of how much that money you kept can buy. Get used to it. The easy money, cheap commodity, days are over.

50 percent rates is a half truth. 50 percent is the top rate that is paid on the part of your income that exceeds the income level where that rate starts. Those paying the top rate will likely end up paying somewhere between 15 and 25 percent tax on all their income.

However, I agree with you that raising taxes is NOT the preferred course of action here. Nor is cutting spending. The deficit hawks won out in the mid-1930’s and aborted the fledgling recovery out of the Depression. It would not be until deficit spending increased dramatically in the early 1940’s that the recovery out of the Depression got into full swing. It was NOT the war that brought the US out of the Depression; it was the deficit spending to finance the costs of the war that ended the Depression. I will say that again: Federal deficit spending is what ended the Great Depression.

It looks like history is about to repeat itself. Everyone is all worked up about the deficit, the deficit hawks are winning again this time, we will get a reduction in spending or a tax increase or both. That will do what it’s always done in the past: abort the fledgling recovery out of the Great Recession and send the US into a Greater Recession, even another Depression.

You can’t spend your way to prosperity. The very idea defies logic and is doomed to fail. Produce or die as a nation. Have you ever seen the effects of hyperinflation? We’re probably at the point of no return already.

The problem is that when the US has a surplus, it has no will to pay down the debt. We were in prime position to pay down the debt in 1999 and 2000. But we all know what happened then: The Vice President (who was probably running the country) said “Deficits don’t matter.”, we started two wars of aggression halfway around the world, we implemented a big tax CUT, and we went every taxpayer in America a check in the mail. What me worry about the deficit? Deficits don’t matter, Cheny said so.

I agree with you that long term we need to pay down the Federal debt. But now is not the time. The problem is that when we have the ability to do so, we get idiots in office who say deficits don’t matter.

We have painted ourselves into a corner and I’m afraid there’s no door or window nearby to crawl out of.

I blame the democrats for a lot, but this mess was brought on by both parties.

People don’t change, they just get more so as they get older. Ergo, you can’t solve a problem using the same thought process that got you in this mess. So if folks don’t change, we need to change out the folks. Oh, that’s right. The US voted for more of the same blue pills.

The solution is easy. It is living with it that is gonna suck. And live with it we will, sooner or later.

Let’s go off the cliff. I don’t mind the tax rate rising as long as it rises for EVERYONE!!! Also why does it make sense to raise the taxes on a single person at 200K and Married at 250K. So if your both successful, bend em both over.

You are missing an important point. Obama wants the rates to increase now so that he can eliminate deductions later and have both…His plan is to destroy our economy and create a totally dependent society so the democretins will be in control forever. And I will be leaving the country for Texas, if it secedes, or for some other destination.

Bruce,
I don’t know why you keep referring to another candidate in 2016, don’t you realize that the Marxist Socialist will never give up power. That is not what they do. See how brain washed we have become in America?

Let´s cut to the chase. DFAULT!!!, no tax manipulation can possibly have an impact on the REAL! deficit of 85 TRILLION$$$ including all current debt and the unfunded long term debt. The only countries that are solvent are the ones with a FLAT TAX!! No special deductions, no corporate dodging, everyone pays the SAME. Look at Singapore as an example. Maybe it´s just to simple for our governmental idiots to understand!!!

I tend toward Mike’s position on Obama’s goals. Sometimes I wonder if he intends to destroy our economic system and drive us into a martial law society during a severe despression. This would allow him maximum power to rebuild the country in “his image”.

All you people that are making less than $250,000 per year that are setting back thinking that this won’t effect me, just wait another year or two when the effects of all the quantitave easing take effect and the purchasing power of $250,000 is equal to $25,000 or less due to the hyper inflation. You will have to demand a salary over $250,000 just to make ends meet. Guess what? You will now be in that much higher tax bracket too. Our president will just grin and say all you rich people deserve to pay more.

Someone above mentioned companies fleeing the United States taking jobs with them. Most of those companies are not fleeing the United States, but are fleeing the unions that fleece them for any profit they might see. Check it out. Most are unionized companies. Unions…..more votes for Obama.

Let’s see now. If there are about 3 million of us in the federal government each and all costing say an average of $75,000/year and none of them is/are creating any real wealth (like a “Boeing” does), how do the rules that government cranks out, help us hold onto our present standard of living? Every single government employee’s wage + his or her income tax + office + paid vacations + paid medical + paid sick leaves + pensions is paid NOT by anyone in government, rather ALL of that has to be paid out of SOLD PRODUCTS by the Private Sector in competition wih all the world’s other producer, so if we want to hire more workers in the Private Sector, that cannot happen unless government asks for LESS money and starts moving 1,000,000 of their 3,000,000 government workers across into the Private Sector where instead of being a tax, theyh will instead become working taxPAYERS into a smaller government –and as thaht government COST (to the private sector) starts to go DOWN, the Private Sector workers can keep more of their present remaining pay after taxes and therefore have more money to spend into the Private Sector! And that more consumption then means more sales of Private Sector Products and so we can hire more workers to handle the greater volume of sales of our Products out into the world and here come those 1,000,000 government workers to take those jobs and help us start turning around this mess so our kids have something other than their elders HUGE DEBT that their immature ELDERS are using up on ourselvesl, the kids be damned! There is one other step that could be taken here to turn this mess around IF we had mature, responsible adults here (and obvioiusly about 55% are not, given the results of the recent election!), then we would all take a 15% pay cut, all at the exactsame time, and that would be fair and equal and allow us to cut the PRICES of the Private Sector’s products so that we could sell more and more products that would be priced lower and thus get us more profitable SALES and THAT would require still more new workers to help produce the larger number of sales. This concept would move toward realityh and it would leet this generation of adults pay down it’s own debt instead of leaving that debt and fewer freedoms to our kids and also honor our Founding Fatfhers who must be wondering why the hell they ever bothered to “risk their lives and sacred honors” for this bunch of thankless “adults” who got our freedom from (English) govvernment demands for more and more taxes from the workers in their Colonies from which that government never gave anything back, just always demanding more from the workers in the Colonies. Has anything really changed? Governments are all about taking-from the working members of a group, paying themselves first, then transferring what’s left to those less efficient who will vote for government als their assumed benefactor when in fact it is the workers in the private sector whose work and output of real wealth is what holds all this mess togetherf in spite of government(s)!

Check out Clower/Piven/Alinsky Rules for Radicals playbook. They are implementing this strategy line by line to perfection. This conflicts with everything the US Constitution and We the People rely upon to maintain a free country. This is a concerted effort to sabotage capitalism and sell us down the river. All parties are in on it, or the GOP would be demanding criminal charges or impeachment of Obama. Treason, dereliction of duty, conspiracy, fraud, operating Ponce schemes, bribery, insider trading, taxation without representation, declaring war upon We the People with the ” War on Drugs”, circumventing and usurping Congress with Czars, crafting treaties that cede control of our Constitution to the UN which gun control, 1/2 of offshore mineral royalties, labor and wage rules and how to raise our children as well as freedom of speech. Obama is preparing to run the UN and is transferring our rights so he can play community organizer, a race baiting, class warfare, wealth redistribution plot on a global scale, to achieve the fantasy of a Marxist “New World Order” utopia. This will result in the deaths of millions of people before the world comes to it’s senses. These people are PURE EVIL.

Let’s see now. If there are about 3 million of us in the federal government each and all costing say an average of $75,000/year and none of them is/are creating any real wealth (like a “Boeing” does), how do the rules that government cranks out, help us hold onto our present standard of living? Every single government employee’s wage + his or her income tax + office + paid vacations + paid medical + paid sick leaves + pensions is paid NOT by anyone in government, rather ALL of that has to be paid out of SOLD PRODUCTS by the Private Sector in competition wih all the world’s other producer, so if we want to hire more workers in the Private Sector, that cannot happen unless government asks for LESS money and starts moving 1,000,000 of their 3,000,000 government workers across into the Private Sector where instead of being a tax, theyh will instead become working taxPAYERS into a smaller government –and as thaht government COST (to the private sector) starts to go DOWN, the Private Sector workers can keep more of their present remaining pay after taxes and therefore have more money to spend into the Private Sector! And that more consumption then means more sales of Private Sector Products and so we can hire more workers to handle the greater volume of sales of our Products out into the world and here come those 1,000,000 government workers to take those jobs and help us start turning around this mess so our kids have something other than their elders HUGE DEBT that their immature ELDERS are using up on ourselvesl, the kids be damned! There is one other step that could be taken here to turn this mess around IF we had mature, responsible adults here (and obvioiusly about 55% are not, given the results of the recent election!), then we would all take a 15% pay cut, all at the exactsame time, and that would be fair and equal and allow us to cut the PRICES of the Private Sector’s products so that we could sell more and more products that would be priced lower and thus get us more profitable SALES and THAT would require still more new workers to help produce the larger number of sales. This concept would move toward realityh and it would leet this generation of adults pay down it’s own debt instead of leaving that debt and fewer freedoms to our kids and also honor our Founding Fatfhers who must be wondering why the hell they ever bothered to “risk their lives and sacred honors” for this bunch of thankless “adults” who got our freedom from (English) govvernment demands for more and more taxes from the workers in their Colonies from which that government never gave anything back, just always demanding more from the workers in the Colonies. Has anything really changed? Governments are all about taking-from the working members of a group, paying themselves first, then transferring what’s left to those less efficient who will vote for government als their assumed benefactor when in fact it is the workers in the private sector whose work and output of real wealth is what holds all this mess togethein spite of government(s)!

The president doesn’t want to “punish” Republicans by not going after deductions. He’s just not crying a river because someone can’t afford a 6th large mansion or a 10th huge yacht or his own private island, while that wealthy person tells someone else who is sick & impoverished “Tough luck. Medicare is too expensive.”

And going after deductions would be cruel to the poor. If the deductions for charitable donations disappeared, there would not only be no government help for the poor & sick, due to budget cuts, but charities would not be able to help the poor, the sick etc. either, due to greatly decreased donations. I know your view of the poor & those on Social Security, Krasting, is the same of that of Marie Antoinette. “Let them eat cake.” Well, Obama doesn’t feel that way, & neither do most Americans.

If this was a sporting event, say, a wrestling match, without a referee (the press is in Obama’s back pocket) Obama would make sure he not only won, but broke all the limbs and blinded his opponent. The man is a ruthless asshole, carrying a grudge because those who dare to disagree with him. It scares me to death he has so much power. The more he gets the more he seems to want.

I’m just a simple average Joe, so what do I know? But if you ask me, Obama is a Muslim Trojan Horse. Destruction of America is his hidden and lofty goal. When it comes to reaching goals Americans want them tomorrow if not yesterday, the Chinese can wait 20 years, the Arabs and Persians can wait centuries and their hates and loves are passed on to their offspring’s DNA. Obama is one of them.

It doesn’t have anything to do with Obama. He’s just a pawn like the rest of congress in a very big global game. They want the playing field level across the major countries to facilitate their ambition of one world government. The method is to use the wealth of this country to elevate the lesser countries. Not to break this country but weaken it so we meet the others on their way up as we’re going down. Of course they profit from all sides along the way. It’s the same money that finances both sides of almost every war for example. The countries are elevated but at the cost of indebtedness to the lenders. The war money is then spent on war machine which coincidentally is owned by…. you guessed it, the same money guys.

Notice how 2 of the biggest warmongering banking families in history, the Rothschilds and the Rockefellers are rarely in the press anymore? Do you think they’re gone? Not the richest anymore? They changed their ways? Do you think Rothschild doesn’t own the major banks in most of the European countries anymore? We have history if you care to research of the wicked practices of these guys to gain wealth and control at the expense of peoples lives. Again I say Obama is a pawn. He will be well rewarded.

Exactly David, We have laws against foreign influence over our Constitution. Any elected official who conspires in private to undermine or influence the laws that effect We the People is guilty of treason. Right after Obama was sworn in, him and Hillary disappeared to meet the Bildenberg bankster’s to be heralded as the puppet in chief, to implement their Marxist fantasy of a NWO utopia. What about George Soros, who meets with Obama and minions, conspiring and crafting our demise. All politicians involved in Constitutional malpractice need to be prosecuted by We the People, but who is going to press charges, Eric Holder? There is hope. http://WWW.JoinAmericaAgain.com Their website was recently wrecked by some commies, but should be up again soon. They are vetting every politician for their criminal actions. Criminal and civil charges will be prepared and sent to every member to be notarized and filed in their respective States. Hundreds of thousands of complaints will flood the court houses across America. They have no protection or immunity in State Courts. They will be stripped of their wealth and inprisoned. The Tea Party and millions of other pissed off citizens will reclaim our Constitution from our elected TRAITORS!

Boehner simply needs to pass the permanent extention of the Bush tax cuts in the House and make a statement: “When the President and Harry Reid can produce a Senate budget, we’ll restart negotiations.”

Dave:
You are so right. Our fearless leader is a classic egomaniac, narcissist with juvenile tendencies. He is completely INCAPABLE of accepting any criticism or responsibility for anything. Benghazi massacre? That was Hilary’s fault. Fiscal Cliff mess? It’s all Boehner’s fault. Mortgage & banking crisis? It was all Bush’s fault. Simply amazing to me. This guy absolutely redefines the term “TEFLON” President. Nothing is his fault. All of this of course was due to being coddled, pampered, and “channeled” into every position he has ever held. Whether it be President of the Law Review in college, Senator of Illinois, or President. Most importantly, he has never held a real job in his entire life. Never met a payroll. Never hired (or fired) an employee. Never raised capital or managed a budget. He is a complete pied-piper that has led these guilt-ridden people to vote for him because if they did not re-elect him they would be accused of racism in their inner circle of intellectuals. The Presidential election of 2012 was an “American Idol” contest where Obama performed his usual “sleight of hand” to convince people he is cool and his adversary was not. The voting public “bought it” hook, line and sinker. And in the process have sealed their doom. We are screwed. Another Depression has now been absolutely guaranteed with this impostor and amateur in charge. Nice work people. Morons.

You can’t spend the same $ on two things at once caprice? It’s already been printed that the average tax increase for the middle class American will increase by over $2,200 which means that the average middle class person will suspend spending that amount for items for which they would otherwise be taxed on the retail/wholesale level purchases which will decrese tax revenues by that level of mulitplication of the number of Americans who will suspend their spending, in order to have the new tax money available for the IRS. I guess we’re suppose to suppose that this move constitutes a new approach to an economic recovery some how? I can hardly wait to see OUR New America arise from the ashes but when exactly did OUR tax authorities say this New America would arise? It seems that America has been over the physical cliff into total economic decline sense 1971 when President Nixon closed OUR US Gold Window and it would seem clear to all of US by now that no namby pamby, so called recovery based upon new taxes can turn that trend around via bloated whims. This monster must just be another tactic to create economic distractions from OUR real goals as a Nation?

There seems to be an excess of smoke and mirror effects originating from both sides of the aisle. Recall that this upcoming ‘event’ was devised jointly via bipartisan committee agreement. In reality, it was a cowardly scapegoating move for both parties, so that neither would reap the blame, directly or immediately, for things that really need to get done (but that are dangerous to endorse, for either party). The fact is, both revenue increases and spending cuts are a true necessity, if we are going to limp on down the fiscal highway. Now, it’s all about the blame-game though; who will take the brunt of the blame for the truly necessary cuts and revenue increases–who will be the real scapegoat?

Clearly, Democrats have no fear of being seen as protectors of the proletariat, so continuation of their ongoing class-warfare campaign is a no-brainer; they are pleased to be positioned squarely against the so-called ‘rich’ (defined as those earning >250K/yr). In fact, they have positioned themselves to be the peoples’ heroes with regards to both taxing and spending. Advocating a tax on the highest 2% makes them seem like they support the ‘people’, or average, (lower?)mid-to-lower class earners–the majority–and so does proposing weak (essentially nil) budgetary cuts. In reality, its neither a real budget-boosting increase nor is it a seen to be a real personal burden to simply add a few additional points onto their (the ‘rich’) tax burden. That is, the resulting increase in revenue would neither make much of a dent in the deficit, nor break the backs of the ‘taxees’. The latter will either wince and grumble, or grin-and-bear it; either way, they’re essentially screwed, and nobody else cares. Those 2% don’t likely vote for them, anyways–a win-win.

On the other hand, by opposing either of the former (weak and ineffective) positions, Republicans are, by default, positioned as advocates of the ‘rich’, which feeds the class-warfare monster. Trying to reframe the issue to include such nebulous things as ‘deductions’, instead, further embeds them into the ‘rich’ camp; what the hell are deductions, to the average ‘Joe’, anyways? Likewise, advocating deeper cuts in spending is another alternative, but such would surely be demagogued as ‘draconian’ cuts, further alienating the party from the masses. However, there is a way out of this vicious circle of total BS; taking control of rhetoric and getting real.

Getting ‘Real’
It is inevitable that some group must be taxed, but neither party is going to commit political suicide by suggesting the middle or lower classes should be targeted. However, In reality, everyone knows that we aren’t going to get out of this fiscal mess without doing so. Lets talk about “fair”: Talk about fairness. The reality is that everyone will have to suffer to some degree–and that seems only fair. Everybody will have to share in the solution; not just the top one or two percent. Maybe propose a sliding scale tax increase for everybody, with 5% on millionaires down to 1% at lower brackets? yeah, I know–suicidal, but real. Likewise, There must be huge, even draconian, cuts to the budget. This means that non-discretionary spending must be reined in. This will inevitably lead to pain at the lower end of the financial totem pole. However, to do nothing, or not enough, means we all go down the tube, and I’m talking total financial collapse. On the brighter side, the reality is that after a (perhaps prolonged) period of shared pain, we would all benefit from the eventual recovery and a return to growth and prosperity. Try selling that to our instant-gratification/there-is-no-future generations…Ha! no way!

What, then, is a better ‘reality-based’ solution? Republicans need to reframe themselves as the protectors of ALL Americans–the protectors of our capitalistic society and for all the freedoms that go along with it. They need to make the government (not the ‘rich’, or Republicans) seem to be the ‘bad guy’, as Reagan did in (better) days-gone-by. Get to compromising on things that matter, while asserting points all Americans can agree with. Agree that, OK, the two percent will be taxed a bit more, and then agree to compromise with Dems on whatever minute cuts that eventually will be set in motion–as a compromise, they should be able to get some decreases in spending beyond those proposed initially by the Dems/Obama–Hey, it’s a start. Not enough, agreeably, but a start. We could build from there in the near future.

Then pound the message into the public regarding the real problems facing us. The fact is, even if we SPENT ABSOLUTELY NOTHING ($0.00) BEYOND NON-DISCRETIONARY SPENDING, WE WOULD STILL BE RUNNING A TRILLION DOLLAR [+] DEFICIT–EVERY YEAR! Show them simple graphs to reinforce their understanding, because the truth of the matter is, the public has no real idea of the sad state of the Union! Educate the public! To anyone and everyone, it would seem, therefore, ridiculous to be adding additional ‘stimulus’ spending, as proposed by Obama–this could fix that obvious mistake, if it is pounded into the public psyche. Also, as suggested by Steve Forbes recently, set the Republicans as champions of the retired ‘everyman’ (OK, already mostly their base, but seems more universally friendly to all, as everyone [eventually] uses both Medicare and/or Social Security) by mandating that Social Security trust fund assets be converted to marketable Treasury bonds, instead of fake ‘IOUs’ now present[*]. Selling such bonds would raise some cash, while strengthening the public’s confidence in the shaky (ponzi) scheme as well as government, in general, and Republicans, especially. Cut off subsidies to everybody and everything not required for national security. This means farmers, as well as oil companies. Give some of them a withdrawal period to ween off the teet. They will either adapt and survive, or fail. If they can only rely on taxpayers’ money to get by, then they need to find something else to do or produce–simple as that. We also need to be assured that big businesses and banks (etc) will never be bailed out–ever–again. Again, if they fail because their practices were unsound, even criminal–as it has been–they deserve to fail. We all feel like we got the shaft, while big business got all the breaks–for free, and off our backs (then gave huge salaries and bonuses to CEOs); it’s that kind of favoritism that is clearly not seen as fair to the taxpayers, and it widens the gap between the classes–not good.

Other ‘Real’ Reforms or Proposals that Republicans (and really, Everyone) Need to Back:

Support Freedom, Privacy, and Constitutional Rights as ‘Untouchables’
The last few (Obama and BushII) years have wreaked havoc upon our Constituion and our rights, fueled by so-called ‘terrorist’ threats. Frankly, the chances of being actually threatened by some terrorist act are pretty slim-to-none. I feel more threatened by losing my rights–and I WILL fight for them–with foreign or domestic enemy. So you Republicans better wake up and start championing our rights–and the potential loss thereof, or we might become really disenfranchised. Use fear–Scare the public [yes, scare!]–by constantly drumming about those fascist executive orders [&/or public bills], ‘Homeland Security’ measures (etc) allowing surveillance, arrest, and detainment of Americans without charges [even indefinitely]–and then propose some legislation to prevent governmental abuse of our God-given rights from happening–&/or go to court!! I tell you, I don’t know why these things go on without more Republicans expressing extreme outrage, but if they don’t ‘nip this in the bud’, I’m afraid they have lost my support. Period. Forever…There is just no excuse for undermining the Constitution, and our rights, as set forth therein!

Promise to Revamp the Tax Code, Balance the Budget, and Fix or Phase-out Social Security:
All, without putting anyone in the ‘poor house’. Yes, the tax code is huge, unwieldy, and unfair. Simplify it and make it fair for everybody, and increase revenue overall, by 5%. Cut spending, across-the-board, by say, 10%. If we limit growth on all governmental programs, we should be able to balance the budget within a few years–a decade at most. Doing the foregoing would not only save America from itself, but also increase confidence in our government, and improve both the economy, as well as our credit rating. Keep a good safety net under us, and add flexibility in times of war or national distress or disaster. Make Social Security into a real retirement program, or simply mandate a retirement program for all, akin to health insurance, yet keeping it out of governmental ‘hands’. We all know anything done by government is full of waste, fraud, and abuse, so keep it private, and keep it fair. Explain how the current ponzi scheme will not be tenable as the baby boomers drain off all the funds, leaving nothing for the next generations. One must also consider ‘Means Testing’ for ‘entitlement’ programs; Since we don’t have enough for everyone to get benefits, in the long-run,we should reduce or eliminate providing them to those who don’t ‘need’ them. The difficulty will be setting limits that would be seen as ‘fair’. Perhaps a voluntary opt-out program with some added incentive, like discounted services or a tax break of some kind?This is a better alternative than raising the retirement or Medicare eligibility age, which is certainly not viewed positively, by anyone–and is not fair.This will also enamor the younger generation–future voters, and those who simply hate anyone who might be thought of as ‘rich’.The truth is, if it’s fair, we will all sacrifice in order to save America–just recall the last world war–Propaganda works wonders.

Get Tough on Government Corruption:
Get tough on graft and corruption in the ‘evil’ government by proposing limits on, or better yet, eliminating lobbyist organizations’ ability to ‘buy’ favors or influence via campaign financing. Get money out of the hands of Unions, corporations and PACs by limiting donations to small amounts by individuals ONLY, and make these transparent and open to public scrutiny. Perhaps limit contributions to those from their own home state or district? Pass a campaign finance bill mandating free TV time to be equally divided among competing candidates or parties–the networks will hate it, but if framed properly, it could be their ‘public service’ contribution to our society, and their duty. Could this actually enable people to vote for a good candidate that perhaps has limited or no funding from outside–even a real ‘average Joe’? I hope so! Eliminate the revolving door of congressional office holders going into lucrative ‘consultant’ jobs (etc) in corporations they helped via legislative action (yes, we, the people [aka everybody] see that as obvious corruption) and eliminate their retirement benefits altogether, unless they remain active as a career of 20+ years. Alternatively, put them all on Social Security retirement and healthcare plans (yup–they would have to pay in, like everyone else). This should be done for all government employees, as nobody should get any advantage over everyday people. These things are needed for Americans to see that their politicians are not just a bunch of crooks working for ‘the man’ or the banks/corporations. Yes, we need to see this happen!

Address Real and/or Perceived Waste, Fraud and Abuse:
Do an independent, internal audit on every program of any significance to evaluate, then eliminate, waste, fraud, and abuse. Offer real incentives to governmental employees to increase efficiency and save our tax dollars. Doing the foregoing will both energize government employees, as well as increase positive opinions towards both them, and the government. It would also engender positive opinions upon those who promote and achieve success (Republicans )We need to see government working for us, and for public employees to be seen as public servants once again. EZ cost-cutting example: Cut off Saturday mail service. Yeah, we can wait till Monday…

Advance Both Education and Employment:
At present, we are getting an ‘F’ in education, even compared to most 3rd-world countries. This spells ‘doom’ for both our children and the future, as well as our future economy. Considering the current system pumps out increasingly worse students for increasingly greater per capita spending, we need a new system! We need to free up our children to become all that they can be, instead of holding back everyone to the level of the least able, as it is currently. My proposition? First, drop the requirement for attending 12 years of school, and stop reinforcing the status quo of current ‘education’ practices. Really, the limited skills needed to graduate are truly pathetic, by any standard. However, in a more modernized system, people could gain more knowledge, faster, and be on their way to a well-paying career in any field in which they truly excel. Everyone benefits, and America will remain prominent. How? Design a free, universal education plan that can be implemented as individualized and self-paced study, in addition to guided studies using instructors, as needed. A core curriculum could be produced that can be implemented online, with modules for myriad ‘elective’ or alternate topics, as desired, and with demonstrated proficiencies, even advanced, or college-level, topics. All that would be required are some computers and/or pads, or even a big screen monitor for larger classrooms, and the coursework modules. Such coursework could be used in extant schools, in which many parents rely upon now mostly as babysitters, or could be used at home, or in smaller study groups with supervision, or a combination of both, as needed. Those without a computer could lease/borrow one, or be given one every ‘x’ number of years–the money saved on school administration and salaries could be considerable, so this is not really a sticking point. Use a pool of current teachers and professors to get each subject’s content certified as meeting minimum competency standards, at each level of study, and get started educating our children the right way–on an individualized level. States are already doing so; this can be done so that even home-schoolers can get the accredited skills and competencies in all subjects deemed (universally) necessary. States could maintain their own standards, as well as control content. Those particularly adept at one or more skills could also improve and accelerate their learning, independently, and perhaps enter into an industry or educational apprenticeship (see below). We could likely save a lot of money, time, and resources, while simultaneously improving the overall education of our children to be able to compete within the global market.

As an adjunct, and in partnership with industry, devise and implement a voluntary mentoring/apprenticeship program for our youth, especially for those fields of employment and education in which we are lagging behind other countries, or behind the expected needs of the near future. First off, this would ensure that our changing needs for future technologies will be met. It would also encourage employment, and at an early age–gainful employment–not service jobs. This should be a partnership between people and industry, or educational institutes, not necessarily government. If it is beneficial to all parties, then it will be good for the economy, and will be deemed a good idea by both parents and youth. This could help the party gain support that will carry on for years, even generations.

Reform the Judicial and Prison Systems:
Stop dumping money into failed projects like the ‘war on drugs’ and on incarceration facilities for the ‘victimless’ crimes. Stop legislating morality and get out of people’s lives, and out of our families’ business. If we spent as much money on promoting economic growth or needed infrastructures as we did on prisons, we would not be in the spot we find ourselves. Geez–legalize or decriminalize drugs, and then tax them like cigarettes and booze, and we would be in the black in five years or less, probably without even cutting spending. Use some portion of those taxes to promote rehabs. Also, if we didn’t have such a FAIL school system, there would be more competent people to be working at jobs, instead of leeching their lives away in our prisons. Economic improvements set in motion by aforementioned proposals would also mean more employment for underemployed populations, decreasing crime rates overall. For those imprisoned, I suggest we mandate that they work in order to pay for their own room and boarding costs. Perhaps we would not need illegal immigrants to pick our farm produce, do our landscaping, keep our common areas clean,etc., if we had access to convict labor? Maybe even get a profit for the states? Maybe a convict could learn a trade that could keep them out of prison in the future? Maybe we could compete against the Chinese if we trained cons to work in actual factories?These are really worth doing, or at least considering.

At any rate, if the Republicans can’t get it together, and Democrats continue their socialistic, class-warfare routines, maybe we should all form a moderate, middle ground party aimed at American peoples’ core values and virtues–without all the posturing and rhetoric, and BS social issues–the Republocrats? Think about it…

Good points and insights. This all boils down to an adjustment period after a credit collapse, along with bumping up against limits to growth. The easy money days are over, and we’ll just have to see how the “people” adjust to it. Nobody wants to give up their lifestyle, but that is what needs to happen. Hopefully we won’t go down the road of scapegoating and a two class system.

The ‘Fiscal Cliff’ is a distracting understatement – the US is poised at a fiscal catastrophe! From where do many of you get your economic theories? To believe, as does PimaCanyon (and Bernanke?) that because deficit spending rescued you (the US) from the Great Depression it can now solve your current woes is ridiculously naive. While deficit spending enabled the US to implement the production of goods during wartime demand (initially, mainly from other countries – exports), such spending generated profits which could reduce or repay the deficits. This continued for a relatively short period post-war until, being progressively out-competed by overseas producers, you lost your edge and it became cheaper to import equivalent (or better) consumer goods. Reducing demand for US produced goods inevitably led to reduced internal wealth production and accumulating current account deficits – when you ran out of money to pay for your imports you just kept borrowing (in large measure from your overseas suppliers!). Even less wisely, you now effectively borrow huge sums from yourselves by ‘paying’ for fiat money ‘printed’ by the Federal Reserve with IOUs (bonds) issued by the Treasury to ever increasing debt ceilings with (I suggest) little prospect (short of another war?) of ever attaining the excess productive capacity and necessary demand which could generate sufficient profit to repay the debt. Increased taxation – taking money from productive capacity (whether business, labour, or saving) and using it to repay debt or allow increased government expenditure – isn’t the solution. As things stand, when interest rates (inevitably) rise the US will have trouble just paying the interest on the debt, let alone Obamacare, etc ! Let the ‘Fiscal Cliff’ occur – it will introduce all to the inevitable chaos ahead.

gold and silver gold and silver gold and silver gold and silver gold and silver gold and silver gold and silver gold and silver gold and silver gold and silver gold and silver gold and silver gold and silver gold and silver

GET GOLD AND SILVER WHILE YOU ALL STILL CAN, I DONT LIVE IN THE US BUT I CAN SEE FROM 1000s MILES AWAY WHATS GOING TO HAPPEN TO YOU ALL IT AINT GOING TO BE PRETTY…….WHATS MORE, WHAT AFFECTS YOU GUYS WILL AFFECT ME AND MY FAMILY…………..GET SILVER AND GOLD WHILE YOU STILL CAN AT THESE CHEAP PRICES……….GOD SAVE US ALL OTHER WISE POLITICIANS GOING TO SEND US ALL TO FISCAL HELL WHICH INTURN WILL SEND US INTO A LIVING HELL

How about giving our Dear Leader the exact tax increase on wealthier Americans he demands, as part of a bill that also does 10% cuts in spending across the board, NOT on phony projections but on 2012 levels? Also throw in budget reform that starts each fiscal year with an actual budget increasing or decreasing from the previous one, approved by the House, Senate, and President. Failure to pass a budget would result in no paychecks for the lot of them until they do.
Let Harry and Obama sit on it, then they will have to explain why. This will seem pretty fair to the average American.

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About Me

Bruce Krasting
Westchester, NY
United States
I worked on Wall Street for twenty five years. This blog is my take on the financial issues of the day. I was an FX trader during the early days of the 'snake' and the EMS. Derivatives on currencies were new then. I was part of that. That was with Citi. Later I worked for Drexel and got to understand a bit about balance sheet structure and corporate bonds from Mike Milken. I was involved with a Macro hedge fund later. That worked out all right, but it is not an easy road. There was one tough week and I thought, "Maybe I should do something else for a year or two." That was fifteen years ago. I love the markets. How they weave together. For twenty five years I woke up thinking, "What am I going to do today to make some money in the market". I don't do that any longer. But I miss it.